Correlation Between Kuaishou Technology and Zhihu
Can any of the company-specific risk be diversified away by investing in both Kuaishou Technology and Zhihu at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kuaishou Technology and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuaishou Technology and Zhihu Inc ADR, you can compare the effects of market volatilities on Kuaishou Technology and Zhihu and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kuaishou Technology with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuaishou Technology and Zhihu.
Diversification Opportunities for Kuaishou Technology and Zhihu
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kuaishou and Zhihu is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kuaishou Technology and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR and Kuaishou Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kuaishou Technology are associated (or correlated) with Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of Kuaishou Technology i.e., Kuaishou Technology and Zhihu go up and down completely randomly.
Pair Corralation between Kuaishou Technology and Zhihu
Assuming the 90 days horizon Kuaishou Technology is expected to under-perform the Zhihu. In addition to that, Kuaishou Technology is 3.84 times more volatile than Zhihu Inc ADR. It trades about -0.17 of its total potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.19 per unit of volatility. If you would invest 364.00 in Zhihu Inc ADR on October 25, 2024 and sell it today you would lose (27.00) from holding Zhihu Inc ADR or give up 7.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Kuaishou Technology vs. Zhihu Inc ADR
Performance |
| Timeline |
| Kuaishou Technology |
| Zhihu Inc ADR |
Kuaishou Technology and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuaishou Technology and Zhihu
The main advantage of trading using opposite Kuaishou Technology and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuaishou Technology position performs unexpectedly, Zhihu can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Zhihu will offset losses from the drop in Zhihu's long position.| Kuaishou Technology vs. Tencent Holdings | Kuaishou Technology vs. DouYu International Holdings | Kuaishou Technology vs. Tencent Music Entertainment | Kuaishou Technology vs. Weibo Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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